Peugeot-Vauxhall: UK and Germany raise concerns on deal talks

The UK and German governments are seeking to safeguard jobs in the potential merger of the Vauxhall and Peugeot carmakers.

Ministers have raised concerns after PSA Group, maker of Peugeot cars, said it was in talks to buy General Motors’ loss-making European business Opel.

Opel has thousands of workers at its plants in Germany and UK arm Vauxhall.

Business Secretary Greg Clark said he would make a “strong case” for the firms to keep manufacturing in the UK.

Mr Clark met with union officials on Wednesday to discuss the future of Vauxhall, which employs 4,500 staff at plants at Ellesmere Port and Luton.

‘Unacceptable’

Meanwhile, Germany’s government has signalled its concerns and frustrations with the possible deal.

Economy Minister Brigitte Zypries said it was “unacceptable” that Opel and French firm PSA had not consulted ministers or unions before going ahead with the talks.

German ministers will discuss the deal with the French government in an effort to limit the potential impact on German workers, Chancellor Angela Merkel’s spokesman said.

In a bid to contain the outrage, General Motors (GM) chief executive Mary Barra travelled to Germany to answer questions about the deal on Wednesday.

PSA also said its chief executive Carlos Tavares planned to meet senior German officials, possibly including Mrs Merkel, in the near future.

Opel employs about half its workers, about 19,000 people, in Germany.

Ministers will not judge the deal yet, but “it is clear that the government will accompany this process”, Mrs Merkel’s spokesman Steffen Seibert told reporters.

The announcement from PSA, which is 14% owned by the French state, comes a week after US carmaker GM reported a loss of $257m (£206m) from its European operations last year.

That was the 16th consecutive loss-making year for GM in Europe, bringing its cumulated losses on the continent since 2000 to more than $15bn.

PSA, which already works with GM in Europe on several projects, said a takeover was among “numerous strategic initiatives” being considered.

‘Protect jobs’

Len McCluskey, the Unite union leader, said he welcomed a “positive” meeting with the UK’s business secretary about the tie-up, saying he had “responded to our call that the government needs to be involved”.

“Peugeot, of course, have a significant French government involvement, so it’s important that our government is involved and Greg Clark has made it clear that the government will be involved,” Mr McCluskey said.

“Our common objective is to make certain that we secure the continuation of work at Ellesmere Port and Luton and Toddington.”

Mr Clark has spoken to senior executives at General Motors and said he would remain in close contact with the carmaker.